In a closed economy, the values for GDP, consumption spending, investment spending, transfer payments, and taxes are as follows:

Y = $12 trillion.

C = $9 trillion

I=$ 3 trillion

TR=$2 trillion

T = $ 3 trillion

Using the information above, what is the value of private saving and public saving?

A. private saving equal $9 trillion and public saving equal $ 3 trillion.

B. private saving equal $1 trillion and public saving equal $ 2 trillion.

C. private saving equal $2 trillion and public saving equal $ 1 trillion.

D private saving equal $3 trillion and public saving equal $ 9 trillion.

Question

Business

Ashly

4 October, 17:44

In a closed economy, the values for GDP, consumption spending, investment spending, transfer payments, and taxes are as follows:

Y = $12 trillion.

C = $9 trillion

I=$ 3 trillion

TR=$2 trillion

T = $ 3 trillion

Using the information above, what is the value of private saving and public saving?

A. private saving equal $9 trillion and public saving equal $ 3 trillion.

B. private saving equal $1 trillion and public saving equal $ 2 trillion.

C. private saving equal $2 trillion and public saving equal $ 1 trillion.

D private saving equal $3 trillion and public saving equal $ 9 trillion.

+3

Answers (1)

Know the Answer?

Chester · Answer 1

Option (C) is correct.

Explanation:

Private saving refers to the savings of the households which cannot be used for the consumption and tax payment.

Public saving refers to the savings of the government.

Private savings:

= Income - Consumption - Taxes + Transfer payments

= $12 - $9 - $3 + $2

= $2 trillion

Public savings:

= Taxes - Transfer payment

= $3 trillion - $2 trillion

= $1 trillion